UK Changes Employee Benefits Tax Rules

The UK’s popular “salary sacrifice” tax benefit will undergo significant changes in 2017. Until now, employees have been allowed to swap part of their salary for non-cash employee benefits, like pension contributions, medical insurance, mobile phones, appliance purchases, and gym memberships, but the program is expensive and the government has decided to cut it back. Some perks will still be allowed however, including:

ultra-low emission cars

pension savings and advice

childcare

cycle-to-work

Other perks are allowed only until April of 2018, including:

company cars

accommodations

school fees

The new limitations are predicted to cost employees and their employers £85m in 2017 and 2018 and to raise £1bn in additional tax revenues over the next six years.

Bret Silverberg

Director, Content Strategy, Globalization Partners

Bret Silverberg joined Globalization Partners in April 2017 as Director of Content Marketing. Bret has extensive experience in publishing, including his background in human resources and employment marketing.

This material has been prepared for informational purposes only, and is not intended to provide, nor should you rely on it for, legal, tax, or accounting advice in any jurisdiction. You should consult your own legal, tax, and accounting advisors as part of your expansion plans.